Cigarette sting vehicles lined up at Fort Monroe

HAMPTON — It's still an open question what will become of the nine vehicles purchased using nearly $400,000 from Hampton's Blue Water Tobacco cigarette sting.

But the mystery surrounding their location is no more: The unmarked vehicles — six SUVs, a van, a sedan and an SUV/pick-up truck hybrid — are lined up behind a locked chain link fence at Fort Monroe.

The late-model vehicles include two Chevrolet Suburban LTZs; two Chevrolet Tahoe LTZs; a Chevrolet Avalanche LTZ; a Ford Escape; a one-ton Chevrolet G-30 Express van; a Honda Pilot; and a Honda Accord.

The vehicles — most of them black with tinted windows — sit in a parking lot at the deactivated Army post, near some construction trucks and lighting equipment. Chevrolet's "LTZ" marking indicates a fully loaded, top-of-the-line version of a vehicle.

When and whether the vehicles will be used again by the police or another city department remains to be seen.

The city had once treated the vehicles as being akin to seized assets, to be resolved by the courts through an asset forfeiture process. But Hampton Commonwealth's Attorney Anton Bell has notified the city that the vehicles — as well as about $715,000 still left in the undercover firm's bank account — are "not matters of asset forfeiture."

That's because, Bell said, the assets were not seized from suspects during criminal investigations, but instead purchased with the cash raised by a police "churning" investigation. That's an operation in which money raised by the case is pumped back into the operation to keep it going.

But before simply putting the cars and cash to city use, City Attorney Cynthia Hudson and City Manager Mary Bunting said the city is awaiting an opinion from the Virginia Attorney General's Office regarding the legal status of the assets.

The Hampton cigarette investigation, which operated under the name Blue Water Tobacco, was designed to catch people in the act of buying cigarettes in low-tax Virginia and trucking them to higher tax states, such as in the Northeast, for resale.

In the sting, which initially began in partnership with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the company would get cigarettes from tobacco makers such as Philip Morris, advertise tax-free cigarettes online, and sell them out of a warehouse off Aberdeen Road.

Though no arrests were made during the 19-month operation, more than $3 million flowed through the company's books. Cash generated by the business was used not only to buy more cigarette product, but also to purchase nine cars and SUVs, fund out-of-town trips, and buy electronics, among other expenses.

Former Police Chief Charles R. Jordan Jr. shut the operation down in January following misconduct allegations pertaining to officer travel and "per diem" allowances.

Aside from the continual purchase of more cigarettes, the vehicles appear to be the largest set of expenditures in the undercover investigation.

According to city records, Blue Water Tobacco spent $392,352 for the nine new vehicles, including purchase price, sales taxes and services such as extended warranties, maintenance programs and road hazard protections. With an average price tag of $43,594, the costs of the cars ranged from a high of $57,427 for two vehicles, to a low of $17,930.

Six of the vehicles were purchased on New Year's Eve 2010, while two were purchased on Jan. 6, 2011, and another was purchased on Feb. 13, 2011.

Citing the undercover nature of the cigarette operation, the city would not say which officers drove those cars, or why they were necessary to the investigation. The city provided heavily redacted purchase receipts, showing the pricing but blacking out the dealership, purchaser and salesman, as well as the year, make and model of the vehicles.

Hudson said Friday that one of the nine vehicles parked at Fort Monroe, the Ford Escape, was acquired during the investigation, but not purchased with company proceeds. That statement couldn't immediately be squared with sales receipts provided to the Daily Press that show nine separate vehicle purchases.

It has so far been unclear whether only officers directly involved in the cigarette operation drove the vehicles, or if other officers drove them, too.

Hampton City Council member W.H. "Billy" Hobbs Jr. said he recalls that nine vehicles were purchased from First Team Automotive Group. He recalls that six of the vehicles were purchased at the company's Hampton Chevrolet dealership, while three were purchased at an affiliated dealership, First Team Honda in Chesapeake.

Hobbs worked with First Team for 15 years. At the time of the purchases in December 2010 and January 2011, Hobbs was working as general manager of First Team Honda and a vice president of First Team Automotive Group.

Hobbs, who now works for Hutchens Chevrolet in Newport News, wasn't on the council at the time of the purchases. He did not get elected to the City Council until May of this year, well after the purchases were made.

Hobbs said he remembers Hampton officers coming into the First Team Honda dealership in December 2010, asking whether he wanted to bid on some Hondas. "I said, 'Sure, I'd love to,'" Hobbs said. "We never pass on a bid." He said he put his proposed prices in a sealed envelope, which officers picked up later.

He said he asked why the officers were interested in Hondas, and they replied that they wanted vehicles that would "blend in." Several of the SUVs were purchased fully loaded, which Hobbs interpreted as resulting from a need to "impress the bad guys." The robust maintenance programs the vehicles came with, Hobbs said, "tells me they weren't planning on taking these vehicles to the city garage for anything."

Though Hobbs said he didn't ask what the vehicles would be used for, he figured they were for an undercover operation. He remembers them being purchased in the name "Blue Water Tobacco." Because police vehicles are typically purchased in a city's name, he said, he called Jordan to make sure everything was legitimate. "He said, 'That's all on the up and up,'" Hobbs said.

Hobbs said that the vehicles were sold at what he termed "invoice" pricing. "We don't make a lot of money on those units," he said. "But at the same time, you move the vehicles."

Hudson, the City Attorney, said the Hampton Police Division did not put the vehicle purchases out to a formal bid process. Under the city's normal purchasing provisions, purchases of that size would entail soliciting competitive sealed bids.

In this case, Hudson said, officers sought out three "price quotes" for each of the vehicles. The city didn't provide documents for those quotes as of press time Friday.

Friday morning, Bunting and Hudson initially said they could "neither confirm nor deny" that the fleet of vehicles at Fort Monroe are the ones from Blue Water Tobacco. They argued that the Daily Press should not publish photos of the vehicles for public safety reasons — given that they had been driven by undercover officers.

But Acting Police Chief Tommy Townsend told Hudson Friday afternoon he didn't have a problem with the picture being published, because the Blue Water Tobacco investigation had been over some time and the unmarked vehicles were not altogether distinctive. "It's not like they're pink Cadillacs," he said, in a statement relayed by Hudson.